Over the last week, NWST1100 surged by 5.47%. The index price made a breakout from the upper trendline of the Symmetrical triangle chart pattern which indicates the start of a new bullish trend. Over the last four months, Ethereum based tokens recorded significantly larger gains.
*We gauge the crypto market breadth and direction of the market by showing charts 2100NEWS Digital Assets Total Index (NWST1100) which represents the top 1100 Digital Assets. The information-laden chart is difficult to read at first glance but the chart shows key price information, important decisive price levels, momentum, trading volumes, and crypto market breadth.
The previous report showed, that our assumption for the last week had been: a more likely course was a move to the 750 points. If the supports represented by the 143-day EMA held, a quick rebound would follow. The NWST1100 chart shows that during the last four days of the week, bulls controlled the index, the index price made a breakout from the upper trendline of the Symmetrical triangle chart pattern which indicates the start of a new bullish trend. At the top we see momentum indicators: RSI, PPO lines and PPO histogram started rising, PPO zero crossover which provided evidence that underlying trend turned upward. The chart below compares the percentage of DA trading above 50 days EMA for:
- 100 Large-caps members of NWSL100 (top box)
- 1100 members of NWST1100
- 100 Ethereum Tokens members of NWSET100
- 100 Coins members of NWSCo100 (bottom box)
over the last 10 months. All four A50R lines had risen. *The percentage of digital assets trading above a specific moving average is a breadth indicator that measures internal strength or weakness in the underlying index.
Outlook for this week
Looking ahead, the Momentum indicators give us the following signals: the RSI is 64 (bullish); the PPO histogram bars and the PPO may continue sloping up in the coming days. At the bottom of the chart, we see the Breadth indicators that could change direction. This constellation is the basis for my opinion: a more likely course for the next week is a move up inside the upper Keltner Band.
Performance of different groups of Digital Assets (Coins and Tokens)
The crypto markets experienced a sharp move up over the last week, the table shows that the total (NWST1100) index surged by 5.47%. Other Tokens index NWSOT50 was the strongest.
Digital Assets decoupling
The breakdown of the market into groups represented by 2100NEWS DA indexes enables us to measure decoupling much more accurately than can do others who do not have the tools in the form of a full range of indexes. Over the last four months, Ethereum based tokens have decoupled. Their prices did not follow Bitcoin and Ether represented by the NWSBE. The chart below shows, that Ethereum tokens (NWSET100) have been pushing higher each week. In July Coins and Large caps followed NWSET100.
Crypto (Digital Assets) compared with global equity
The chart below compares the performance of the average represented by our NWST1100 Digital Asset index with the average global share represented by the Dow Jones global W1Dow index. This year the NWST1100 outperformed W1Dow twice by 60%. The first wave up was an extended Christmas rally then the pair suffered a collapse caused by the corona pandemic, and the crypto markets had fallen more than the equity markets and lost their advantage. Since March 18th NWST1100 vs. W1Dow pair had rebounded and peaked two months ago. This year, crypto investment represented by NWST1000 beat global equity by 46.8% while over the last 12 months NWST1100 was 19% lower. The box in the middle of the chart shows the original NWST1100 price, at the bottom of the chart is W1Dow. The blue curve is the average index price over the last twelve months. We can see that the NWST1100 price and W1Dow price are above average, but the NWST1000 average is 30.09% lower than 12 months ago.